LOS ANGELES — Doorways chained shut and “Members Only” signs warn casual passersby against stopping along this five-block stretch of downtown known as the “Cannabis District.” This gritty corridor is a major hub for the estimated $9 billion black market for the state’s illicit cannabis products.
Products sold here, including a flood of counterfeit vape materials from China, are coming under scrutiny as federal authorities investigate the mysterious vaping-related lung illness that has sickened at least 530 peoplein 38 states and claimed nine lives.
Many sick patients said they bought vape products containing THC, the psychoactive component of marijuana, on the black market, officials and clinicians said. The biggest legal marijuana market in the world is California — and the black market there is three times as big, said David Abernathy, an executive with Arcview Market Research, a cannabis investment and market research firm.
“There’s a huge market for what are now illicit cannabis goods, and they tend to be much cheaper than their legal counterparts,” Abernathy said.
Interviews with more than a dozen business people in both the legal and illicit cannabis markets, as well as officials and clinicians, point to recent changes in the ingredients used in popular marijuana vaping devices that could be making people sick. They say black market operators are using more thickening agents to dilute THC oil because of a crackdown by state authorities that has made the oil scarcer on the black market. THC oil is used to fill tiny disposable containers known as vape cartridges, which are heated to create inhalable vapor. Vaping cartridges are among the most popular items in the legal and illicit markets, industry analysts said.
Industry experts said that many of the unfilled cartridges come from Chinese factories that follow the Instagram accounts of well-known brands and churn out copies by the thousands. Black market manufacturers buy the cartridges in markets like this, fill them with THC oil or other mixtures and package them for sale by distributors.